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tv   Bloomberg Markets  Bloomberg  July 19, 2016 10:00am-11:01am EDT

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vonnie: we will take you from san francisco to cleveland to washington as well. here is what we are watching. goldman sachs topping estimates on the top and bottom line, posting is evident 4% increase on second-quarter profit. >> mann sent over jack's the , calling the $55 billion proposal financially inadequate. also saying it remains open to constructive conversation. and melania trout's speech draws charges of plagiarism of michelle obama.
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it is about 30 minutes into the trading day of the u.s. so let's head straight to the markets desk or julie hyman has the latest. dow just upe the about 13 points. not a huge decline there. the nasdaq, close to .3%. take a look at what is going on here. and that is factoring into the trading today. if you look here on the bloomberg, it is energy shares a lot of the earnings reports we are watching are actually pushing stocks higher, one of the reasons the dow's not falling as much as the s&p and the nasdaq. let's get to the earnings movers.
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shares plunging by 14%. the focus tends to be on the subscriber growth. subscribers, one and a half million overseas. the company itself has projected as well as what analysts have projected. explaining this as impart an increase in prices in the united states. helping support the dell to some extent. drugs holding up well, particularly for remicade. ibm is another one watching. earnings knowing year-over-year but eating estimates. higher
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the company in particular reporting that at its cognitive solutions unit, including artificial intelligence technology, that revenue there rose to the first time, so that was giving investors optimism but that seems to have faded away. >> thanks. 90 minutes to the close of trading. got the gr our function on the bloomberg for the stoxx 600. about .6%. the majority of industry groups are heading lower. commodity producers leaving the losses, down 2.4%. followed by carmakers down 1.7%. best performer on the stoxx 600, jumping the most on record, we're up 21% rising after the
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german online apparel retailer raised its forecast and basically doused concern on falling profitability, allaying those concerns, one analyst saying full your cost to and someby about 20% saying this is particularly good news as monsanto's margin has an climbing. we are seeing weaker sterling today. this is even though u.k. inflation earlier came in that of any elected -- better than expected. alicia has more from the newsroom. from lastments weekend passes attempted coup have been neutralized there at all terrorists involved in the coup have been suppressed. in 200 32t resulted
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deaths. thousands of turkish military personnel have been detained. the u.s. should not protect what he calls a terrorist leader. secretary of state john kerry says to you will have to provide evidence. australia, malcolm has been sworn in for a second term as your. the national -- national coalition was a narrow winner. his government will have a seat in of just one australia's house of representatives. hillary clinton calls donald trump the most dangerous candidate ever to run for resident. the nominee spoke with charlie rose. i gave myn: when first speech based on what he had said in san diego, i have followed it, but even i was
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surprised when he began pulling together all the information. let's return to torture and you know what, i will order the american military to commit war crimes. nato, we don'tof need them. this kind of talk, which some people say, well he cannot possibly mean it, maybe if he had said it six months ago and listened to people who knew more than he will ever know, maybe so, but not now. what he has laid out is the most dangerous and reckless approach to being president that i think we have ever seen. can watch all of that interview with hillary clinton on charlie rose at seven and 10:00 p.m. eastern time here on bloomberg tv. trump's life appears to have lifted the republican convention speech from an unlikely source -- michelle obama. the similarities between this speech and the one that was
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given by michelle obama in 2008. the speechwriters included fragments that reflected molina trump's thinking. more on this later this hour. dayal news 24 hours a powered by 2600 analysts and journalists. this is bloomberg. vonnie: global markets are hitting polls. international monetary fund scrapthis is bloomberg. the forecast citing the brexit vote outcome and warned of the damage could worsen as confidence falters between investors and companies. the cohead of global investment management solutions at j.p. morgan asset management, where he was even more than $170 billion. thank you for joining us. affected brexit, not
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so much the rest of the world. world growth is going to come down substantially in the next year? >> we're focused on the long-term. seen, it has been a good environment for risk assets. theover the course since brexie have seen the rally quite a bit and it has proven time and time again, these political and economic events which tend to be isolated to a particular region, generally do not cause larger impacts in the global economy. vonnie: at the same time, you are saying 6% is the new 8% for returns. 6% a little optimistic? >> we do not think so. a balanced and diversified
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investor got roughly 8% from a portfolio of stocks and bonds. we think return just from the benchmark data will be about six. ,t was less than that last year and it is shaping up to be a little bit of a better year this year. on balance in the next 10 years, six. asset allocation, better management selection, using the tools. >> hello. your colleague on bloomberg radio and he had an interesting perspective on bonds, saying they could no as a safety portfolio. i want to get your view on how investors can -- should be balancing the portfolio given the environment with the yield heading ever lower.
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>> continues to be a bit for high-quality duration. been allocated is the high-yield market. default rates are very low. we think the risk of a near-term recession is very low. very good environment for high-yield. a good environment for high-volume corporate debt. we know there is not a lot of yield to be found around the world. >> i want to bring in a call from morgan stanley. i got the call showing the call for the 10 year treasury yield versus the average forecast. they are seeing the 10 year treasury yield dropping as low as 1% by march of 2017. what is your take? >> we start of the year at two and a quarter percent and we got low around brexit and we have seen that jumped a bit since
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then. we think finishing the year in that range is reasonable, back 200 basis points. overall right now for balanced and long-term investors, the range bound trade is where we think it will be. we know there is not a lot of >> i want to ask you about u.s. treasury yields. that would form a portfolio as well. into my terminal here, you can see the u.s. 10 year yield, it dips below 1.8% right down to 1.83 and change and we are back. where does it end in the year and where does it go? >> i cannot tell you exactly where it will end in the year. in isnk the range it is where it will be here and we think it is important for people
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to be diversified across fixed income sectors. native monetary policy will continue to be good for equity markets. back to mys year comments around yield, anything with a yield or bond proxies even in the equity market, that have really driven equity markets higher. high-quality duration including the 10 year. vonnie: thank you. we have breaking news. julie hyman is at our desk. julie: blockbuster health care deals that are in jeopardy. u.s. antitrust officials are poised to buy lawsuits -- a takeover of cigna as well as aetna's deal to buy humana. downward, shares are taking on these headline spirit justice department officials apparently are thank you.
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we have breaking news. julie hyman concerned the deals would harm customers. this would transform health insurance by turning five companies into three companies. the final decision will come this week and will be made this month whether the doj will block these deals. this is according to people familiar with the matter. we are seeing a clear market reaction to the headlines coming out and there had already been questions about whether these were going through. there had been reports in recent days that there were talks about --dashed investor verse divestitures. that will add to the course of people saying there's too much going on. we shall see. get more headlines on that soon. coming up, republicans hope the second day of the convention will provide -- provide a chance
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to pivot from yesterday. we're live with more from day one and what we can expect from date he does. this is bloomberg. ♪
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live from london and new york, i am vonnie quinn. a rare and controversial -- a controversial speech from donald trump as his wife. it was suggested her words strongly echoed those of michelle obama's convention speech eight years ago. listen. raised with sore many values.
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ms. trump: my parents invested in me values. ms. obama: that your word is your bond. ms. trump: that you -- your word is your bond. obama: that you treat people with dignity and respect. ms. trump: that you treat people with respect. we are joined now. was it plagiarism? the similarities are too than we showed there, to be a coincidence. it seems to have an an error. the campaign compounding it by coming up with an overnight statement and statements today from the chairman of the campaign that suggest they are trying to pretend this did not happen. it is unfortunate. she gave a solid speech. if than we showed
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there, to be a coincidence. it seems to she -- if this had t happened, the speech and the quality within the biggest story of the night. we will see before the convention reconvenes this toning, if they find a way put it behind them. right now it is a raging controversy with the biggest question being how did this happen. vonnie: a guest this morning spoke to you about this very issue. let's listen to what he had to say. >> she did a great job. most people, if you were to do a poll on the subject, i think you would see it overwhelming support and people are impressed with the job she did last night. i think it was a successful night. vonnie: he is not too worried and it will go away. mark: he went on to say if someone plagiarized a speech for them.e would fire the question of accountability of how this happened is a big one. i think he is right that the press is making a bigger deal
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about this then is probably right, but that is the way conventions work. for insiders and some of the ablic, can you put on four-day show where you control the agenda and you control what happens inside the orinda -- the arena, i do not think anyone could say and otherwise strong speech, that was a successful moment. vonnie: let's pivot to later today. what do we expect? mark: the big speakers tonight, chris christie, the governor of new jersey, who made most grid of his disappointment in being passed over as a running mate for donald trump, and donald son, new to, his but an impressive
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presenter, i think the challenge for the campaign is clear the deck, however they can do it, so the focus is on those three speakers and the others rather than on what is still a lingering koch verse c to say the least over missed trumps speech. -- mrs. trump's speech. it is difficult to make this an opportunity because mrs. trump, the highlight of the night, and someone who does not speak in public very often. every candidate i have ever of theirprotective spouse pre-much above all else. we have not heard from mr. trump yet on the controversy and before we do, i do not inc. we have had the last but an imprese presenter, i think the challenge for the campaign is clear the deck, however they can do word w this will go. want the convention to be all about donald trump. was intended to put all the focus on testifying on behalf of his character and holidays, which would make him in her view a great president and leader. that takes the focus off of him and onto this
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controversy is not what the campaign rock death camp wants. difficult to do because in our culture, there is videotape of the controversy. by denying there is plagiarism, or any meaningful overlap melania trump's speech and michelle obama's speech has only compounded the controversy. not a person following this closely thinks that there -- does not think there were some problems. gearing up for day two in cleveland, managing editor of bloomberg politics, thanks. sachsahead, goldman reports. more on second-quarter results next. this is bloomberg. ♪
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vonnie: i am vonnie quinn in new york. let's head to the markets desk with julie hyman. julie: this has to do with the .ig health care let's move through them. apparently poised to perhaps block these deals. perhaps at not attempting to buy humana for $28.5 billion. you can see the shares moving lower after the headlines. you look at humana shares, we saw a big zigzag in the shares, 2.5%. the even bigger deal in the works, and anthem for cigna for $46 billion, justice department officials are apparently concerned about the effects the deals would have on consumers. stille cigna moving lower . it has not rebounded like the
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others, down 1.6%. we have seen an effect on the shares from these headlines coming out. the final decision coming this week and will be made by the end of the month. all of that according to people familiar with the situation, down 1.7%. that is the latest on the headlines coming out and the effect we are seeing on the stocks. to follow another one of the big stories we are watching this morning. goldman sachs earnings and shares have turned it around. on the one hand, there was a big increase in second-quarter .rofit, above estimates like competitors, increased and fixed income trading. the margin by which it estimates in that unit are lower. equities on the flipside fell by 11%. we saw a decline in investment
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revenue. goldman sachs did not raise its dividend as some analysts had estimated. some good and bad in the report. expenses also came in higher than estimated. interestingly enough, shares up by about 7%. we have not seen a huge gain under the 10 year point. he has talked about more reductions potentially after there was a 5% cut in the second quarter versus the first. >> thank you. it is still ahead on bloomberg. the imf lowers its growth forecast. the chief economist will join us to tell us what impact brexit has on the outlook. this is lumbered. -- this is bloomberg. ♪ [hip hop beat]
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♪olympics 2016, let me get you on my level. ♪ so you never miss a moment, ♪ ♪miss a minute, miss a medal. ♪ ♪ why settle when you can have it all? ♪ ♪soccer to wrestling. track and field to basketball. ♪ fencing to cycling. diving to balance beam. ♪ ♪all you have to sa♪ ♪ is, "show me," and boom it's on the screen♪ ♪ from the bottom of the mat, ♪ ♪ to the couch where you at? ♪ ♪ show me the latest medal count♪ ♪xfinity's where it's at. ♪ welcome to it all. comcast nbcuniversal is proud to bring you coverage of the rio olympic games. vonnie: live from new york and london, i am vonnie quinn.
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>> you are watching bloomberg markets. let's check in with bloomberg first word news this morning. >> thank you, the islamic state is claiming responsibility for an attack in germany. passengers described as a 17-year-old from 10. come at least twice its people were killed when a chinese tourists burst into flames on a highway. no official word on what caused the fire but the bus caught fire after spinning out of control and smashing into a guardrail. prime minister theresa may says her government must not be defined by the decision to leave the european union. her first cabinet meeting today and told her ministers that all of them would share with possibility for making the departure a success.
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more missile launches from north korea. kim jong-il imposes regime -- according to south korea, which --s two were short term short missiles. south korea called launches a reckless provocation. news 24 hours a day powered by more than 2600 journalists and analysts in more than 100 countries. his bloomberg. >> thank you. the international monetary fund and the brexit clothesling heavily on it. 1/10 of one percentage point, it says the u.k. itself could see a sharper drop here for more, we're joined by the imf chief josh chief economist. great have you on the program. investors really did underestimate the impact of brexit. how do you see the impact -- this impacting your scenario for
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future action from the fed, the bank of japan, and the ecb? >> i think it creates an overlay of risk in the economy on top of revis risks. central banks are taking a attitude, entertaining the possibility that interest rates may stay lower for longer. in the case of the bank of england, possibly entertaining and interest-rate cut. >> why did you only downgrade your global growth forecast by 1% given that you have downgraded the u.k. by so much and you called brexit a real -- in the works? >> primary effect will be on the will have to which completely renegotiate its trading relationships not only with the eu but the world trade organization.
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that will be a big change which causes businesses investing, it might affect the financial services industry in london, which might relocate impart to other locations. in the u.k., it is a huge deal. for europe and those countries that trade heavily with the u.k., it is significant. in the broader context of the global economy, based on the data we have now, less than four it may be more of a moderate effect and that explains the baseline case where we downgrade growth by .1 percentage point this year and next. you said on your news conference call that you do not thing, need for any such however, when you see events like what happened in turkey over the weekend, or the brexit outcome, we see currencies we
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can and currency volatility. what can central banks do to ensure their economy stays stable? and think central banks governments also have other policy levers, and they have to adopt policies that will ,aintain growth and stability and maintain price stability. exchange rates themselves will adjust to those circumstances. u.k., it look at the may end up, not clear with the negotiations will look like, with trade relationships with europe which are less favorable. in that situation, it is not unreasonable to think that sterling would depreciate.
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conversely, for policy to divert itself from holding that stable, it would prevent itself from other pressing priorities. >> i would like to ask you about turkey in terms of what turkey has done to stabilize matters after the attempted coup. has it done enough and what further impacts could we see economically and on financial markets? >> the financial markets have been somewhat volatile. the central bank and other authorities have done a good job in thesuring the economy markets, particularly the central bank has provided liquidity to the financial system to prevent it from seizing up. in that context, i think the economic developments will be driven more by political events that occur. i think the authorities have reacted properly and energetically to contain the damage.
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have certainly seen action from the central bank today as well. broadening out again to central banks, what do you think about helicopter money as a policy option? >> it is a colorful metaphor that i think of secures the real problem, which is that hasentional monetary policy been daring pretty much the entire burden of maintaining price expectations and supporting economic activity. helput a notch -- enough from other policies, for example structural or fiscal policies, the money idea basically reflects the hope that fiscal policy would come into the game. way to that is a better .onceptualize what we need i would worry otherwise that we
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would blur the lines between monetary and fiscal policy in a way that might prejudice our ability to maintain -- have madeknow you your concerns about the banking sectors and not just europe, but also china. you see any banking crisis starting in the world and how should economist -- economies be tackling it right now, italy and china and so on? >> i do not think we are seeing imminent crises but i think we are seeing banking systems that countrieswth in some and some regions due to legacies of assets, nonperforming loans, which prevent banks from basically supplying credit to new and dynamic borrowers. i see more of a drain on growth over time -- overtime from the failure of them to step in
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energetically. the number of countries are trying to do so. in china as well as in europe. what about the presidential election. have you modeled that into any kind of forecast at all depending on the out come now that we have two likely nominees? they are still presumptive but on friday, one will possibly be an actual nominee. it is really dangerous for us to get into the politics of any country in the fund does not do that. based on campaign promises, it is hard to know what policies could or would actually be implemented. so i think we would have to assess incoming data after a new administration takes office. thank you for joining us
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today. dumpingng up, investors netflix shares after they reported the lowest subscriber growth in years. billions on original content. this is bloomberg. ♪
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vonnie: you are watching bloomberg it i'm vonnie quinn. >> this is your global business report. yahoo! -- could be announcing in about a week. vonnie: the second time is no charm for a buyer.
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monsanto is open to further conversations. >> in our quick take today, we will look at indonesia's shanking rainforest. , now dryy the leader conditions from el niño are making the situation even more dire. vonnie: the winning bidder for yahoo! could be made in about a week. sources tell bloomberg that the quick and loan founder dan gilbert and investor capital management are the leading bidders. >> our board's's independent strategic review committee, a well-run, robust process, continues to manage this effort. we are making great progress. we have no announcement today but i can say we are deep in the of evaluating proposals and alternatives and we will update our shareholders as soon as it is prudent. >> johnson and johnson is
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increasing its full-year profit and sales forecast after estimates were topped with results in the pharmaceutical division. shares have almost doubled since the start of 2010 and the company has topped earnings estimates every period since the first quarter. latesto has rejected its $55 billion takeover offer. the company calls the bid financially inadequate here monsanto says it is still open to talks with any parties about a deal. bloomberg news reported that monsanto might consider a deal over another german company. for the third time this year, volvo has cut its outlook. it fell 29% in the second quarter and a swedish company said it would lower its output in the summer. sales also fell in europe. time now for our bloomberg quick .ake, where we provide context
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good news about the world's rain forest. construction in the amazon has slowed but not everything is well in another part of the globe. fedndonesia, dry conditions more than 100,000 fires over the course of 2016 here the most damaging on record. the legal/denver technique was used. smoke went over singapore, where pollution spite to hazardous levels. indonesia overtook brazil as the in -- in twice the rate of what the government reports. pulp, paper, and especially palm oil. the company produces about one half of the world positive $50 billion oil crops each year. is the argument. conservationists are pushing for corporations and consumers to get involved in groups need to
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follow the lead of other countries that have slowed deforestation by strengthening its moratorium and by restoring damaged -- to help restore the rain forest. researchers say it could take up to a decade to stop the burning that causes the haze. you can read more about the rain our quick all of takes on the terminal and that is your business report. head to for more stories. >> let's move on to netflix where shares are drastic the following today. disappointing earnings after the bill yesterday. only 1.7h drop with million new subscribers this quarter, most of them abroad. it is due to price increases and not market saturation. have not seen any factory change prices to our 8, 10, and 12 last october.
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we have had a couple of quarters of great growth. i think this is really around change resistance, whatever the price is for something, people do not like it to go up. in terms of new members, most of what drives growth, the new pricing is working great. vonnie: netflix is seeing sales and profit growth from last growing international market. for a breakdown of the report, let's bring in cory johnson, a bloomberg tv editor at large. great to have you. is this a blip or should there be concerns about long-term growth? absolutely concerns about long-term growth and old people like me, older users and younger users, where are the numbers? -- 85.5 million users. the pace of growth is a concern here. in the midst of a lot of marketing spent, a lot of hype around what they are doing, and
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good brand recognition, pace of growth cut nearly in half. the open question with the new industry is how big can the business the, how fast can they grow? ,hen you see growth go from 9% there is great concern. the bigger concern is in the developed market. how big of a pika netflix have in the united states benchmark what we found in the last order in the u.s. was 0.3%, the worst growth they have ever shown in the market and it starts to suggest, maybe the numbers they have got in the u.s. are all the numbers they will have in the u.s. and then you start to extrapolate and say what kind of market share and they get to in the rest of the world if we reach the limits of growth here, we will someday reach it everywhere else and that is the concern. >> the impact of the price hikes
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came as a surprise. was that globally? tell us about the difference in the performance between the u.s. and the rest of the world? globally, a much faster pace. that is to be expected. some growth out there still to be had for netflix. it is again about penciling out those numbers and what control on thatflix have growth? they could spend money on markets. asl is look at the numbers really a function of how much you are willing to pay to get them. it is like circulation in the newspaper magazine business. if you want to spend a lot of you can haveomers, those customers but what is the value of the customers? that folks can look at the headline numbers and hope someday they can make sense in terms of reaching profitability. but if you look at the marketing spent for netflix, as they have taken their foot off the pedal and slow down the marketing percentage of revenues, the revenue growth has slowed down and the user growth has slowed down. a great concern because it
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suggests one of the biggest way users is to spend money on marketing and when they slow down the marketing, they spend on the user growth. that will not attract users automatically. vonnie: marketing but also the .ontent valley stoplicon worrying about subscriber growth? it is a problem for twitter as well. it becomes a matter of quality and not quantity at some point. cory: these guys are facing a problem of competition. a press release last night, they pointed out bidding against hulu and amazon prime. hollywood is as busy as it has ever been. he want to be a content seller and not a content higher these days. netflix is facing an enormous amount of competition. you can see the billions valleyp worrying about subscriber growth? it is a problem for twitter as well. it becomes a matter of quality and not quantity at some point. cory: these guys are facing a ofblem
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dollars guaranteed to content providers. vonnie: cory johnson, editor at large and bloombert west coanchor, thank you for joining us. still ahead, we will take a look at this auction of david bowie gear. that is coming up next to her you are watching bloomberg market. ♪ -- next. you are watching bloomberg market. ♪
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vonnie:vonnie: one of the most recognized artists in the world. something he kept from public view. now nearly 300 works from david bowie's private collection, will hit some of the auction block. a chairman joins us now here in the studio. great to have you on. thank you for coming in. is there a standout he's? >> there were so many fantastic
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works. if i had to name one or two, it would probably a wonderful possibly -- bonnie: that is incredible. describe more for us. is there a particular style and what does that say about the collector? >> this was a passionate and private pursuit. a collection no one was able to see until this particular moment in time. he approached the various artists see collected and the core of the collection are over 200 works by british artists. field, as far up incredible talent and design. of whole arekind you expecting from the auction? the estimate is 10 million
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pounds. it felt appropriate because he is very much the son of london. with international interests, -- >> obviously, any other items of interest? isi think the best thing david bowie is known as a musical performer but is -- what is really of interest is this pursuit he put into place, and amazing painting from 1984. well. minted in the the estimatn pounds. past.t in many ways, he wanted to be a rock star. david bowling himself was wonderful and very proficient. he always had an incredible interest in every way. he was a curator and a writer and even on the editing board of modern painters at one point as well. vonnie: concerned about the timing of the sale, for example, that >> it could impact it in some way.
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>> we had a sale for example last week and almost as a result of brexit, we did well. it is very much a dollar market. i think the name in many ways, probably mean that buyers will focus on that and less on the brexit impact. vonnie: at least somewhere in the world. .hank you so much, chairman past you can read more about this on pursuit. >> happening right now, boris johnson and john kerry are hosting a joint news conference in london. you can see boris job than who was appointed last week. special relationships with the u.s. remains strong. coming up, on the european -- paying the eu
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a record $3.2 billion in we will hear from european competition commissioner. and monsanto rejecting a buyer's $55 billion takeover, calling it an adequate. here is a quick look of what is happening in european stocks. the stoxx 600 down five -- .5%. see this heading lower to 8/10 of 1%. this is bloomberg. ♪
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vonnie: i am vonnie quinn.
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left in are 30 minutes the trading day in europe and you are watching the european close on bloomberg markets. ♪ >> we will cover stories out of washington, brussels, and london in the next hour. fine. hits -- with a my interview with commissioner margaret coming up. donald trump's net worth has increased over the last year. we dive into the figures. we will hear from the ceo after swedish and networking gi


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